In an announcement on February 9, Justin Trudeau confirmed that Canada Emergency Response Benefit (CERB) repayments will be scrapped for thousands of Canadians who incorrectly applied for the benefit.
For several months, members of the public and leading politicians have been calling on the government to backtrack on repayments, particularly because the benefit’s eligibility criteria were considered to be unclear and confusing.
Now that hundreds of thousands of people may be off the hook when it comes to returning the money, here’s everything you need to know:
Why do so many people owe CERB repayments?
When the CERB was launched back in March 2020, it was automatically given to everybody who applied to ensure that Canadians who needed support got it ASAP.
By December, the Canada Revenue Agency (CRA) had discovered that a significant number of self-employed Canadians had misunderstood the qualifying criteria when it came to gross and net income.
The application form stated that self-employed individuals could get the support if they made over $5,000 in 2019 or in the 12 months before applying.
However, the CRA later clarified that the income in this instance referred to net income, rather than gross income — a detail that some people later said was unclear and confusing.
This meant that a large number of people were eligible based on their gross income, but not their net income.
Those individuals later received a letter from the government asking them to repay the money, as they did not technically qualify for it.
Why were CERB repayments scrapped?
Speaking in December, Employment Minister Carla Qualtrough said the CRA had no plans to let people off but admitted they were “looking to find ways to minimize the impact.”
However, on February 9 Justin Trudeau revealed that some people would in fact be let off returning their CERB payments.
Who will be affected?
While hundreds of thousands of people have been contacted by the CRA about CERB repayments for various reasons, it’s the self-employed people who were confused by gross and net income requirements that won’t have to repay.
Announcing the change, Justin Trudeau confirmed “As long as you meet the other eligibility criteria, you will not have to return those CERB payments.”
“The pandemic isn’t yet over, so neither is our support,” he added.
This applies to all applicants, regardless of whether their benefit came from the CRA or Service Canada.
Those who have already repaid their CERB will actually get money back, according to the government.
Additional details about how to claim a refund will be available in the coming weeks.